A former employee of the Centers for Medicare and Medicaid Services is on trial in Manhattan for allegedly engaging in insider trading. After leaving public service, the man subsequently consulted for hedge funds.
According to reports, the man is accused of passing insider information about the government's plan to cut the reimbursement rates for certain types of cancer treatments and to increase the rates for dialysis. The man allegedly provided the information to the partners of Deerfield Management. That fund then used the information to make $3.5 million in profits. The consulting firms where the man was employed were paid $832,000 in consulting fees.
The man received the information from friends who still worked in the government. In addition to the man, his friend and two partners from Deerfield Management are all currently on trial. A third former Deerfield partner who pleaded guilty earlier is reportedly cooperating with the state in an effort to receive leniency in his sentence. Deerfield Management paid $4.6 million as a settlement with the Securities and Exchange Commission and admitted it had failed to supervise its employees, but it did not admit to any wrongdoing.
People who are being investigated for white collar crimes such as insider trading may want to retain help from criminal defense attorneys who are experienced in handling these complex types of cases. White collar criminal matters often involve thousands of pages of documents that must be analyzed. In some cases, lawyers may be able to negotiate with the assigned prosecutors who are investigating the cases before they file charges or seek indictments. Prosecutors will sometimes agree to not file criminal charges in exchange for the payment of civil fines or penalties. In others, the attorneys may try to secure the most favorable outcomes possible for their clients through plea negotiations or trials.
Source: Bloomberg, "Washington leak culture meets Wall Street's insider-trading cops", March 29, 2018